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Eastmain sets out its stall as a three project gold company

Thursday, November 17, 2016 7:31
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Three projects are now under exploration at Eastmain Resources Inc (TSE:ER).

The first is the Clearwater gold project in the James Bay area of Northern Quebec, with a particular but not exclusive focus on the Eau Claire deposit and the 951,000 ounces of measured and indicated resource that it’s already known to contain.

The second is the old Eastmain mine project, which was a healthy producer of gold in 1995. The plan is to work this project up to the point where a restart is feasible.

The third is the Eleonore South project, held in joint venture with Goldcorp and Azimut. This is a much more grass roots play, but the address is highly prospective, as the project is close to Goldcorp’s rich Eleonore mine.

News flow from all three is likely to be prolific as the field season progresses, but particular attention will be paid to the results of the 63,000 metres currently going into Eau Claire.

“The drills are turning,” says Claude Lemasson, the company’s chief executive. “We’re well-funded, fully staffed on site and had some great feedback on the properties following a site visit with some analysts.”

A long way in a short time

The attention of the analysts is particularly pleasing and is a sign of how far the company has come in a short time.

“When I first joined there was just one analyst covering Eastmain,” says Lemasson. “There are five now, and we had a strong representation from additional brokerage firms on the recent site visit.”

Mackie is one of the supporters, and sets the tone quite well for what’s occurring on the ground now at Eastmain’s properties.

“An aggressive launch into exploration mode,” wrote the broker as the field season got underway.

“The company remains one of our top picks in the exploration space, and is well funded to continue exploration at Clearwater, as well at the Eastmain mine and Eleonore South joint venture projects.”

After the site visit the broker called the exploration program at Clearwater “extensive” and “significant” and talked of how infill drilling would help the company glean a clearer understanding of the open pit potential, while slightly deeper drilling will work up the underground.

Lemasson concurs with that view. “We want to firm-up the existing deposits,” he says. “It’s good grade but we felt that there needed to be more drilling to confirm the vein system – to confirm the potential for open pits and shallow underground downdip from the current resource.”

Other drilling will also be undertaken to test for additional mineralisation around the property, but already a path forward is clear.

“The plan,” says Lemasson, “is to complete the drilling program and issue an updated resource estimate and then proceed to complete a preliminary economic assessment the second half of 2017. As we complete the resource estimate and PEA work, we’ll start putting some parameters around what this mine might look like.”

Rebirth of Eastmain (the mine)

While all that’s going on though, the rebirth of Eastmain will be underway. This has been facilitated by a regional development program undertaken by the government of Quebec called “Plan Nord.”

Under the provisions of this plan, the government has built a new all-season road past the Eastmain mine that has had a real impact on the economics.

“That’s a game changer as far as we are concerned,” says Lemasson. Accordingly, a C$1.5 mln exploration program is now underway at Eastmain that will include a significant amount of drilling.

Eleonore South

Finally, work is also underway at Eleonore South, and recent results have been highly encouraging. Grab samples showed gold grades as high as 102.5 grams per tonne and 142 grams per tonne. This work has taken place along the property boundary, on the other side of which Sirios is working up its Cheechoo discovery to the north and east.

It all adds up to an exciting period in the development of Eastmain.

“We have three different projects, all advancing,” says Lemasson. “We are very busy.”

All of which has not gone unnoticed by the market. Eastmain’s shares have risen by 70% in value this year, to the point where the current price of C$0.58 gives the company a market capitalization of just over C$105 mln.

That must be gratifying for those directors and senior managers who have been consistent buyers of the stock. Lemasson has recently taken his stake to 1mln shares after topping up with a purchase of 100,000.  Director Blair Schultz has 0.9mln shares, equivalent to around 0.% of the company.

Joe Fazzini, the CFO & VP of Corporate Development, is in for 0.3mln shares; executive director Mike Hoffman has 0.2mln shares, as does Timo Jauristo, another director with a background in geology. Chairman Laurie Curtis has 0.1mln shares.

Story by ProactiveInvestors


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